Index Trend & Conditions | 08:00 IST
• Major Resistance created at 11,970—12,100 area for Nifty50
• For Thursday, Nov 05, Support at 11,760 with Resistance at 11,960 and 12,030 for Nifty50
• Trends on SGX Nifty pointed to a gap-up start for Nifty50 in India with a 153 points gain. The Nifty futures were trading at 12,060 on the Singaporean Exchange at 08:00 IST
• Contracts tied to S&P500 and Nasdaq futures trading positive in early Thursday morning, a positive outlook of Asia-Pacific early morning trade, MSCI APAC ex-Japan up 1.07% on the day and a strengthening US dollar with 10-Year Treasure extending losses indicate gap-up start with a positive but range-bound (between 12,000 and 11,760) bias for Nifty 50 India
• The current mood in the market is bracing and non-committal
India Markets
| NIFTY 50 | OPEN | HIGH | LOW | CLOSE |
|---|---|---|---|---|
| Wednesday | 11,783 | 11,929 | 11,756 | 11,908 |
Nifty opened negative on Wednesday but managed to hold in the 11,750—11,777 zone, amid a highly volatile global market
Nifty50 added 95 points or 0.80% on Wednesday to close at 11,908
Nifty50 formed a big bullish candle on the daily scale and made higher lows for the third session in a row
Despite the upbeat frontline indices, the broader market displayed some signs of fatigue and did not catch up with the momentum in the blue chip stocks
Any close below 11,535 on this week will put a significant selling pressure on Nifty 50 down to 11,300—11,244 levels, with positional shorting below 11,535 level for bigger targets
Both Realty and Telecom stocks were the worst performers on Wednesday’s session, while Pharma and IT stocks were at the vanguard of the rally
On the up side, crucial level or resistance is seen at 12,000 and 12,100 for Thursday
While, on the downside, support is seen at 11,760 and 11,680 for Thursday
“Having moved up sharply in last two sessions and placed near the crucial resistance in the 11,950-12,050 zone, there is a possibility of minor profit booking at higher levels before it sees any upside breakout of the hurdle,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Any dips down to the 11,800-11,750 zone is going to be a buy on dips opportunity in the market for the next few sessions.”
The BSE Sensex index gained 355 points or 0.88% to 40,616 on Thursday
Bank Nifty opened in the negative and surpassed the previous day’s high to touch the 25,900 level, but witnessed profit booking at higher levels
It formed a bullish candle with a long lower shadow on the daily scale, which suggested dominance by the bulls and buying on declines
India VIX fell 4.29 per cent from 24.24 to 23.20 levels
Broader market indices closed higher on the Wednesday. The Midcap index advanced 112 points or 0.65% while the smallcap index added 0.02%
The overnight call money rate weighted average stood at 3.18% according to RBI data. It moved in a range of 1.80—3.50% as on Nov 03
Israel Ambassador to India Dr Ron Malka has said the countries’ strategic partner in agriculture will play a key role in helping realise PM Modi’s vision to double farmers’ income by 2022
Salaries of Indian employees may rise an average 7.3% in 2021 vs 6.1% in 2020, Aon said in a survey released Wednesday. Around 87% companies are planning pay hikes compared to 71% in 2020
The marginal increase in the forecast comes amid data from car sales and tax collections to factory output suggesting that a recovery in Asia’s third-largest economy is underway
Bumper rains, tax mop up and stimulus-led retail spending are the primary reasons for tailwinds in salary increments
Industries likely to provide the highest salary increases include technology, life sciences, e-commerce, chemicals and professional services while companies in sectors such as hospitality, retail and real estate — severely battered by the pandemic — are projecting an increase but trail other sectors
Analysts see multi-billion dollar opportunities for Indian IT firms and demand for new categories of FMCG products in the post-Covid market. And certain sectors such as real estate may take time to come back
America Markets
Wall Street soared for the third day on Wednesday despite electoral uncertainty, as a divided Congress and lower regulatory risk triggered a rally in the tech sector, amid a week of big market volatility
If Democratic nominee Joe Biden wins the White House, but Republicans retain the Senate, chances for significant reforms or corporate tax increases dwindle. At the same time, that would push the Fed to act further to support economic recovery
“The divided government is the best possible scenario for markets. If it gets that, it’s happy.”
“Up until about last week, the consensus belief was a full blue sweep – now that’s changing you’re seeing a repricing taking place in the market,” Anna Han, equity strategist at Wells Fargo Securities LLC. “We’re seeing a boost today because a more status quo Senate may ease the burden of regulations on the tech sector.”
The Dow Jones jumped 369 points or 1.3% to 27,849
The S&P climbed 74 points or 2.2% to 3,444
The Nasdaq soared 430 points or 3.9% to 11,591
Today in derivatives market, Contracts tied to the S&P 500 added 0.2% while Nasdaq 100 futures rose 0.6%
Trade deficit in the US fell to $63.9 billion in September of 2020 from $67 billion in August, in line with market forecasts of $63.8 billion. Exports jumped 2.6% to $176.4 billion, boosted by sales of soybeans, telecommunications equipment, industrial engines, computer accessories, and transport, travel and financial services. Imports edged up 0.5% to $240.2 billion
Federal Reserve policy decision due on Thursday
Brazil’s industrial production rose for the fifth straight month in September, as billions of dollars in fiscal stimulus spurs broad-based consumer demand. Industrial production increased 3.4% from a year ago. Capital goods output, which is considered an indicator of future investments, jumped by 7% on the month while durable goods surged by 10.7%
“Early prospects for a quick resolution to the U.S. election have given way to the reality of an extended process, not only with regards to the White House but also the Senate,” said Ian Lyngen, a strategist at BMO Capital Markets. “Volatile price action can only be expected to persist for the time being, at least until the path forward becomes clearer.”
A Democratic sweep would lead to a “more strenuous anti-trust review,” which would weigh on large-cap technology stocks and pharmaceutical firms
Asia-Pacific Markets
Asian stocks pushed toward the highest since March 2018, led by technology and health-care firms, as investors sought out defensive sectors and backed away from bets on a massive economic stimulus package
The Nikkei 225 added 1.14% to 23,964
Topix 500 added 0.84% to 1,268
South Korea’s Kospi added 1.53% to 2,393
In Hong Kong, the Hang Seng Index added 2.15% to 25,420
China’s CSI 300 Index added 1.23% at 4,872
Hang Seng China Enterprises Index added 2.67% to 10,368
Shanghai Composite Index added 0.95% at 3,308
Australia’s S&P/ASX 200 added 1.20% to 6,134
Singapore’s Straits Times Index added 1.95% to 2,565
Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan, is up 1.07%
CMC Holdings Ltd., exclusive distributor of Japanese skincare brand Fancl’s Asia business outside Japan, is selling the business. This has drawn preliminary interest from buyout firms including Carlyle Group Inc. and MBK Partners. Fancl had annual revenue of more than $250 million in 2019 outside Japan
Bank of Japan Governor Haruhiko Kuroda noted that the central bank will focus on pumping liquidity to cash-strapped firms hit by the pandemic
US-based BlackRock’s research arm upgraded Asia ex-Japan and emerging market equities to overweight 1-day ahead of the US election on expectations of a Blue Wave Democratic sweep. On other views, the research arm downgraded European equities to neutral as the region’s major economies reintroduce restrictions following a resurgence in cases.
BlackRock downgraded Japanese shares to underweight. A weaker dollar could send the Japanese yen up, putting pressure on the country’s export sector
Australia’s trade surplus jumped to AUD 5.63 billion in September 2020 from a marginally revised AUD 2.62 billion in the previous month
In China, state-run media have highlighted Ant’s failures to comply with regulatory requirements while showcasing the government’s strong market supervision mechanisms and risk controls to protect consumers
“It’s understandable from the regulatory perspective and it is still a better outcome for investors than facing a black-swan event immediately after the listing,” said Lv Changshun, an analyst at Beijing Zhonghe Yingtai Management Consultant Co. “Policymakers can tolerate innovation, but that should not be at the cost of a systemic financial risk. Avoiding that risk is an important foundation to push forward more capital market reforms.”
EU Markets
European stocks ended higher on Wednesday
The pan-European Stoxx 600 index added 2.09% at 362 on Wednesday
Stoxx 50 added 58 points or 2.01% to close at 3,161 on Wednesday
Germany’s DAX30 added 235 points or 1.95% to 12,324 on Wednesday
London’s FTSE 100 added 96 points or 1.67% to close to 5,883 on Wednesday
France’s CAC40 added 117 point, or 2.44% at 4,922
Denmark’s OMX Copenhagen 20 Index added 47 points or 3.52% at 1,394
Luxembourg’s LuxX Index dropped -0.06% at 1,083
Sweden’s OMX Stockholm 30 Index added 1.31% at 1,795
Italy’s FTSE MIB Index added 372 points or 1.96% at 19,358
On the economic data front, services PMIs for Germany and the Euro Area were revised higher, pointing to smaller contractions in October
On the corporate front, shares of Britain’s Marks & Spencer jumped 4.7% after the retailer posted a smaller-than-expected loss for the first half
Car sales fell in Europe’s four largest auto markets last month, signaling demand has relapsed in the midst of another wave of the coronavirus cases hitting the region
UK Markit Services PMI stood at 51.4 in October, down sharply from 56.1 the previous month and below a flash estimate. Employment fell for an 8-month, with firms reporting a lack of new work
UK economy seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021, pressure on Bank of England policy makers, meeting on Thursday, to increase bond-buying to support growth
Bank of England is likely to announce a £100 billion expansion of its bond buying programme at its policy meeting on Thursday
Lloyds Banking Group Plc is cutting about 730 more jobs, mostly at its technology and retail units, as the British lender advances with a restructuring plan
John Lewis is cutting as many as 1,500 jobs at its head office as the retailer struggles to reshape its business in the pandemic. John Lewis said the latest cuts will save 50 million pounds ($65 million) a year and form part of a plan to remove 300 million pounds of costs from the partnership and return it to profit by 2025
Sharon White, chairman of the employee-owned John Lewis partnership, unveiled her strategy for reviving John Lewis last month. It focuses on investing 1 billion pounds in the digital business and shops, reducing costs and pursuing new streams of revenue, such as expanding further into financial services and converting excess space into private rented housing
The Euro-area economy ground to a halt in October and will probably shrink in the coming weeks after governments reinstated lockdowns to contain the pandemic
Oil & Natural Gas Markets
Oil prices rose for a 3rd day by more than 3% on Wednesday, with WTI futures trading near $38.9 a barrel and Brent crude around $41.1 a barrel, amid a big drop in US crude inventories
EIA data showed US crude stocks fell by 7.998 million barrels in the latest week, the biggest decline in 2 months
Sentiments are also supported by signs that Russia, a key OPEC ally, is considering an extension of oil production restrictions into the first quarter of 2021
Natural gas fell -0.52% to $3.062/MMBtu on Wednesday
WTI Crude is trading higher at $38.55 per barrel in early Thursday trade
Brent Crude is trading higher at $40.59 per barrel in early Thursday trade
Natural Gas futures lower at $3.062 per mmbtu in early Thursday trade
On MCX-India, Crude oil futures added 2.73% to 2,897 on Wednesday’s session
On MCX-India, Natural gas futures dropped -50.87% to 227 on Wednesday’s session
A Trump win would be “bullish for oil, as OPEC+ can keep cutting without fear that Iranian oil supply will come back into the market any time soon,” said Bjarne Schieldrop, chief commodities analyst at SEB AB
Gold & Silver Markets (+ copper futures)
Gold traded nearly flat at $1905 an ounce during a volatile session Wednesday, as the dollar rally faded
Silver erased most of the earlier losses to trade nearly flat at $24 an ounce on Wednesday, as the dollar reversed course to trade lower
Copper rose to above $3.1 per pound in the first week of November, recovering from a 2.9% drop in the last trading week of October, supported by growing demand from top consumer China and a decline in production in Chile
US Gold futures (Comex) weakened to $1,908.10 an ounce in early Thursday trade
US Spot Gold strengthened to $1,905.53 an ounce in early Thursday trade
Silver futures (Comex) weakened to $24.15 an ounce in early Thursday trade
Copper futures (Comex) weakened to $310.30 per pound in early Thursday trade
In India, Spot Gold strengthened to INR 50,575 per 10 grams in early Thursday trade
“For copper specifically, the future relationship with China will be massively important,” he said by phone. “My advice would be to sit and wait to see who wins the election, and don’t try to get ahead of it, because everything is so diametrically opposed”
India – NCDEX Agridex
Agricultural futures index tracking the performance of the 10 liquid commodities, was up 0.35% trading at 1,213 ; with major demand seen in Castor Seed and Cotton Seed Oilcake futures on Wednesday
Currency Markets
The dollar index erased all earlier gains to trade slightly lower around 93.4 on Wednesday
INR weakened -0.46% with USD-INR at 74.7462
JPY weakened -0.04% with USD-JPY at 104.5300
CNY strengthened 0.33% with USD-CNY at 6.6554
China’s yuan is emerging as one of the most sensitive assets to the outcome of the US presidential elections. The offshore yuan climbed as much as 0.9% in late trading Wednesday to 6.6202 per dollar, its strongest level since July 2018, after earlier falling as much as 1.4% (cited Bloomberg)
EUR strengthened 0.03% with EUR-USD at 1.1719
GBP weakened -0.46% with GBP-USD at 1.2999
SEK strengthened 0.52% with USD-SEK at 8.7845
| 3-Month LIBOR Rate | As on 04 Nov 2020 |
| US DOLLAR | 0.22 per cent |
| Euro | – 0.54 per cent |
| British Pound | 0.04 per cent |
| Swiss Franc | – 0.77 per cent |
| Japanese Yen | – 0.10 per cent |
Bond Markets
Americas : 10-Year Govt Bond Yields
United States : Down 12 basis points at 0.78%
Canada : Down 6 basis points at 0.62%
Europe, Middle East & Africa : 10-Year Govt Bond Yields
Germany : Down 2 basis points at -0.64%
United Kingdom : Down 7 basis point at 0.20%
France : Down 2 basis points at -0.37%
Italy : Down 5 basis points at 0.69%
Spain : Down 2 basis point at 0.09%
Netherlands : Down 3 basis points at -0.54%
Asia Pacific : 10-Year Govt Bond Yields
India : Down 1 basis point at 5.89%
Japan : Down 1 basis point at 0.02%
Australia : Up 2 basis points at 0.79%
Hong Kong : Up 6 basis points at 0.43%
Singapore : Flat at 0.80%
South Korea : Down 4 basis points at 1.58%
Fund Flows on NSE, BSE and MSEI – Nov 04 2020 (source NSE)
FII Net Buy Rs 146.22 Crore in Cash Market
DII Net Sell Rs (8.13) Crore in Cash Market
